Duolingo Business Model – How it Makes Money (2023)
Duolingo business model – How does Duolingo make money?
Duolingo is a language learning platform that uses gamification techniques to make learning a new language fun and engaging. When Duolingo started out, it gave the premium experience of an ad-free application for free. This is something that is very rare. This therefore leads to the question of how does the company currently valued at $1.5 billion make money? So in this post we are going to take a look at Duolingo business model; how it works and how it makes money.
But first thing first, what is Duolingo?
What is Duolingo?
Duolingo is a digital language-learning platform. The platform offers users the ability to learn over 40 languages.
It is a free language learning platform where they gamify the courses to keep users interested in learning a new language. The platform is accessible from a browser and has an app on every major platform i.e IOS, Android, Windows.
As at 2022 the platform has a whopping 500 million registered user-base, with 42 million monthly active users.
Duolingo is also known for adding fictional languages like High Valyrian and Klingon.
Duolingo Business Model – How it Works
Duolingo operates in modules (called Crown Levels), meaning its language programs are separated into distinct sections. Each module covers a certain topic cluster while moving from basics to more advanced content.
Hereby, Duolingo dictates the order in which these modules need to be completed. As such, new modules only become active once the previous one has been completed.
Below is a detailed guide of how Duolingo works:
Choose a language: Duolingo offers courses in dozens of languages, including Spanish, French, German, Japanese, and more.
Start with the basics: Duolingo starts with the basics of the language, such as common vocabulary and simple sentence structure.
Learn through interactive exercises: Duolingo uses a variety of interactive exercises to help you learn, including listening exercises, reading exercises, and translation exercises.
Earn points and progress through levels: As you complete lessons and exercises, you earn points and progress through levels, which helps keep you motivated and engaged.
Practice with personalized feedback: Duolingo provides personalized feedback on your answers, helping you to improve your pronunciation and grammar.
Learn at your own pace: Duolingo allows you to learn at your own pace, so you can take your time with more difficult concepts and move quickly through easier ones.
Unlock new content: As you progress through the course, new content is unlocked, allowing you to learn more advanced concepts and vocabulary.
Duolingo’s Value Proposition
Duolingo business model provides a very compelling value proposition for both users, advertisers and organizations. Some of the value propositions that has brought Duolingo this far are:
Fun and engaging learning experience
Duolingo uses gamification techniques to make learning a new language fun and engaging. Users earn points, progress through levels, and unlock new content as they learn, which helps keep them motivated and engaged.
Duolingo provides personalized feedback on users’ answers, which helps them to improve their pronunciation and grammar. The platform also adapts to users’ learning styles and progress, providing a customized learning experience.
Duolingo’s language courses are created by experts in the field and are regularly updated to ensure that they provide accurate and up-to-date information. This ensures that users are learning high-quality content that will help them to achieve their language learning goals.
Flexibility and convenience
Duolingo allows users to learn at their own pace and on their own schedule, which makes it a flexible and convenient option for people with busy lifestyles.
How Does Duolingo Make Money?
The Duolingo business model is a subscription-based model. That means it makes money primarily through its Duolingo Plus subscription service. This offers additional features and benefits to users compared to the free version. This sort of Duolingo business model can also be referred to as freemium model. Here are details of the ways that Duolingo business model makes money for the company:
1. Duolingo Plus subscription
The first revenue source of the Duolingo business model is Duolingo Plus subscription. This is a premium subscription service which provides users with additional features such as ad-free learning, offline access to courses, and the ability to track their progress over time. Duolingo Plus costs $6.99 per month or $83.99 per annum.
As of 2021, approximately 6% of monthly active users in Duolingo were paid subscribers. And according to Statista Duolingo premium subscription contributed 74.02% to the revenue generated by Duolingo in 2022.
2. Language certifications
The second way Duolingo business model brings money is through paid language certification exams.
Duolingo offers language proficiency certifications which costs about $49 to take. The certifications are recognized by some employers and educational institutions. So whereas this certification gives an edge to most job seekers seeking to secure jobs in foreign languages it is a great source of revenue for Duolingo.
Though not originally part of the Duolingo business model, but the company later decided to add tiny not so intrusive advertisements that help them generate revenue. This became necessary as the initial model was quite cumbersome and didn’t generate enough revenue. Introducing ads into the Duolingo business model seems to be yielding the desired result as ad revenue contributed 12.1% to the overall revenue of the company in 2022.
4. Language courses for businesses
Duolingo offers language courses specifically for businesses and organizations, which generate revenue for the company.
Duolingo has several competitors in the language learning market, ranging from other language learning apps to more traditional language courses. Here are some of the key competitors of Duolingo:
Rosetta Stone is a language learning software company that offers language courses in over 30 languages. It provides a more traditional language learning experience compared to Duolingo and focuses on building language skills through immersion.
Babbel is a language learning app that offers courses in 14 languages. It provides a more structured learning experience compared to Duolingo, with a focus on building practical conversation skills.
Memrise is a language learning app that uses a combination of mnemonic techniques and interactive games to help users learn new vocabulary. It offers courses in over 20 languages and focuses on building vocabulary skills.
Busuu is a language learning app that offers courses in 12 languages. It provides a more social learning experience compared to Duolingo, with the ability to connect with other learners and native speakers.
Pimsleur is a language learning program that offers audio-based courses in over 50 languages. It provides a more audio-focused learning experience compared to Duolingo, with a focus on building speaking and listening skills.
Wrapping it Up on Duolingo Business Model
Overall, while Duolingo is a popular and effective language learning platform, The Duolingo business model is a mix of freemium and subscription-based model. It’s value proposition has to do with personalized learning and high level quality contents. But Duolingo is not immuned from competition despite how well it is performing. It faces stiff competition from a variety of other language learning apps and programs. Each of these other apps all have their own unique strengths and weaknesses. But overall Duolingo has managed to stay on top.
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